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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Kaiser-Francis Oil Company and Aurora-KF, LLC v. Deutsche Oel & Gas, S.A., Rieck Oil, Inc., and Kay Rieck (3/28/2025) sp-7758
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.gov.
THE SUPREME COURT OF THE STATE OF ALASKA
KAISER-FRANCIS OIL COMPANY )
and AURORA-KF, LLC, ) Supreme Court No. S-18546
)
Appellants, ) Superior Court No. 3AN-17-07911 CI
)
v. ) O P I N I O N
)
DEUTSCHE OEL & GAS, S.A., ) No. 7758 - March 28, 2025
RIECK OIL, INC., and KAY RIECK, )
)
Appellees. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Dani Crosby, Judge.
Appearances: Peter A. Sandberg, Ingaldson Fitzgerald,
P.C., Anchorage, and Frederic Dorwart and Jared M.
Burden, Frederic Dorwart, Lawyers PLLC, Tulsa,
Oklahoma, for Appellants. Robin O. Brena, Jake W. Staser,
Laura S. Gould, and Kelly Moghadam, Brena, Bell &
Walker, P.C., Anchorage, for Appellee Kay Rieck. No
appearance by Appellees Deutsche Oel & Gas, S.A. and
Rieck Oil, Inc.
Before: Carney, Borghesan, Henderson, and Pate, Justices.
[Maassen, Chief Justice, not participating.]
BORGHESAN, Justice.
----------------------- Page 2-----------------------
I. INTRODUCTION
This appeal raises a choice-of-law question: When an Alaska court is
asked to pierce the corporate veil of a Delaware corporation, should the court apply
Delaware law or Alaska law to determine whether the veil should be pierced?
The superior court chose Delaware law. It reasoned that the majority of
jurisdictions apply the law of the state of incorporation. The rationale in these cases is
that veil-piercing concerns the internal affairs of the corporation, and under the "internal
affairs doctrine" a corporation's internal affairs are always governed by the law of the
state of incorporation. The superior court ruled that, under Delaware law, the corporate
veil should not be pierced.
We hold that Alaska law applies. Veil-piercing is not a matter of internal
corporate affairs because the rights of third parties are at issue. And the main rationale
for the internal affairs doctrine - to avoid incompatible demands on the corporation,
its officers, and shareholders - does not have much force in this context. Therefore,
the choice of which state's law to apply to veil-piercing claims is not determined by the
internal affairs doctrine, but by traditional choice-of-law principles, which entail
balancing the relevant interests of the respective states. In this matter, Alaska has a
more significant interest than Delaware. We therefore vacate the superior court's
choice-of-law ruling and remand for further proceedings.
II. FACTS AND PROCEEDINGS
A. Facts
Kaiser-Francis Oil Company (KFOC) is a Delaware corporation
principally owned by George B. Kaiser. KFOC is the parent company of Aurora-KF,
an Oklahoma limited liability company (LLC). Aurora-KF held Aurora Gas, LLC, an
Alaska company that had obtained an oil and gas lease on lands owned by Cook Inlet
Regional, Inc. (CIRI) in Alaska.
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----------------------- Page 3-----------------------
In 2002 Kaiser gave CIRI an unconditional guarantee (the GBK
Guarantee), individually and in his capacity as KFOC's president, of "the full and
prompt payment and the timely performance of all obligations when due of Aurora
Gas." Kaiser and KFOC were prohibited from assigning this liability to a third party
without CIRI's prior written consent.
Aurora-KF began negotiations to sell Aurora Gas to Rieck Oil in 2015.
Rieck Oil is a Delaware corporation that was formed by Kay Rieck for the sole purpose
of buying Aurora Gas. Kay Rieck is also the majority owner of Deutsche Oel and Gas,
S.A. (DOGSA), a société anonyme1 established under the laws of Luxemburg with a
principal place of business in Germany.
Aurora-KF and Rieck Oil reached an agreement for the sale of Aurora
Gas. The terms were reduced to an interest purchase agreement in which Rieck Oil
agreed to "undertake, prior to Closing, the complete removal or replacement of the GBK
Guarantee." Alternatively, the parties could close on the deal without removal of the
GBK Guarantee if Rieck Oil provided a guarantee "in the maximum amount of
$5,000,000 . . . which shall unconditionally guarantee the full and prompt payment and
timely performance of all obligations for any claims brought by CIRI against [Kaiser]
or KFOC."
Aware that Rieck Oil was undercapitalized, CIRI declined to remove or
replace the GBK Guarantee. Aurora-KF and Rieck Oil elected to close on the sale of
Aurora Gas pursuant to the interest purchase agreement. The agreement's
indemnification provision referenced the liabilities established by the GBK Guarantee.
KFOC sought a personal guarantee from Kay Rieck, but he refused because he felt
overleveraged and was unwilling to take on more personal debt at the time. Instead,
Rieck's other company, DOGSA, issued a $5 million indemnity guarantee (the DOGSA
1 Société anonyme, BLACK 'S LAW DICTIONARY (11th ed. 2019) ("French
law. An incorporated joint-stock company.").
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----------------------- Page 4-----------------------
Guarantee). Upon completion of the sale, Rieck Oil owned Aurora Gas, but Kaiser and
KFOC remained liable to CIRI for any unmet Aurora Gas obligations, and DOGSA and
Rieck Oil were bound to indemnify Kaiser and KFOC for any such obligations.
Although Rieck Oil made efforts to have the GBK Guarantee removed, it
remained in place when Aurora Gas was forced into involuntary bankruptcy. When the
bankruptcy occurred, CIRI required all wells to be plugged and abandoned - calling
on Kaiser and KFOC to perform when the defunct Aurora Gas could not. Kaiser and
KFOC demanded DOGSA fulfill its $5 million guarantee, but DOGSA did not. Kaiser
and KFOC also sought reimbursement from Rieck Oil pursuant to the indemnification
provision, which Rieck Oil did not provide.
B. Proceedings
Kaiser and KFOC filed suit against Rieck Oil, DOGSA, and Kay Rieck
alleging breach of contract and seeking to pierce the corporate veil of Rieck Oil to hold
Kay Rieck personally liable for the remediation costs. After discovery each party
moved for partial summary judgment on the veil-piercing issue.
As a threshold matter, the superior court considered whether Alaska or
Delaware's veil-piercing law applied. While the court considered Alaska to be the state
with the most significant relationship to the litigation, Delaware was the state where
Rieck Oil was incorporated. The court summarized two approaches other jurisdictions
have taken to this choice-of-law issue: the internal affairs doctrine and a contacts-based
2
test.
The court concluded that Alaska has a more significant relationship to the
litigation because the case ultimately concerned remediation of wells held by an Alaska
LLC on Alaska land owned by an Alaska Native Corporation. It found Delaware's sole
2 See Pister v. State, Dep 't of Revenue, 354 P.3d 357, 363-64 (Alaska 2015)
(explaining that choice-of-law issue has not been settled in Alaska and declining to
address it because veil-piercing was appropriate under both Alaska and Washington
law).
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----------------------- Page 5-----------------------
interest was in "preserving its status as a favored state of incorporation." However, the
court concluded that "in the absence of definitive contrary guidance" from our court,
the law of the state of incorporation governs. The court explained that "the vast majority
of jurisdictions" apply the law of the state of incorporation. It also read Section 307 of
the Restatement (Second) of Conflicts of Laws to adopt the rule that the law of the state
of incorporation controls shareholder liability for corporate debts.
The superior court applied Delaware law to determine whether veil-
piercing was appropriate. KFOC sought to pierce Rieck Oil's corporate veil under
3
either of two tests under Delaware law : (1) the misconduct test or (2) the alter ego test.
The court first concluded that "piercing the corporate veil under Delaware's misconduct
test requires proof of common law or equitable fraud, neither of which are alleged vis-
à -vis Rieck Oil." The court then concluded that Alaska and Delaware have "similar"
alter ego tests. The court explained that both tests weigh similar factors4 to determine
5
whether a "company simply functioned as a façade for the controlling shareholder."
However, the court determined that the key difference is that Delaware requires, in
addition, proof of fraud, injustice, or unfairness.
After determining that the parties "essentially do not dispute that the alter-
ego factors weigh in favor of finding that Rieck Oil is Rieck's alter ego," the court
focused on whether KFOC could prove the element of injustice or unfairness required
to justify piercing the corporate veil under Delaware law. The court made the following
findings:
3 See Geyer v. Ingersoll Publ 'ns Co., 621 A.2d 784, 793 (Del. Ch. 1992)
("[A] court can pierce the corporate veil of an entity where there is fraud or where a
subsidiary is in fact a mere instrumentality or alter ego of its owner.").
4 See EBG Holdings LLC v. Vredezicht's Gravenhage 109 B.V., No. 3184,
2008 WL 4057745, at *12 (Del. Ch. Sept. 2, 2008) (Delaware alter ego factors); Uchitel
Co. v. Tel. Co., 646 P.2d 229, 235 (Alaska 1982) (Alaska alter ego factors).
5 Winner Acceptance Corp. v. Return on Cap. Corp., No. 3088, 2008 WL
5352063, at *5 (Del. Ch. Dec. 23, 2008); see also Uchitel Co., 646 P.2d at 235.
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----------------------- Page 6-----------------------
(1) Rieck Oil was undercapitalized; (2) Rieck Oil has been
administratively dissolved; (3) Rieck Oil never observed
corporate formalities; (4) to the extent that funds flowed
through Rieck Oil, they appear to have been under the
control of Rieck; and (5) in general, [witness] testimony
supports a finding that Rieck Oil is materially
indistinguishable from Rieck.
However, the court concluded that there was a genuine factual dispute about whether
the element of fraud, injustice, or unfairness required by Delaware law existed.
Therefore, the court denied summary judgment.
KFOC deposed Kay Rieck and then renewed its motion for summary
judgment. The superior court again denied the motion, reasoning that the evidence
could still support a finding that KFOC "knew Rieck Oil was undercapitalized . . . but
proceeded with a risky business deal anyway, and that there was not anything unjust or
unfair about the transaction." The court subsequently held a bench trial on the element
of unfairness or injustice under Delaware law.
After trial the court found no misrepresentations by Kay Rieck or other
conduct that would qualify as fraud or injustice under Delaware law. The court found
that KFOC was aware of Rieck Oil's undercapitalization and "understood the nature of
the risks [it was] undertaking at closing and accepted those risks in order to complete
the transaction and avoid losing Rieck Oil as a buyer." The court concluded that KFOC
"should not be permitted to hold Mr. Rieck personally liable for breach of contract
where, as here, [it] expressly requested that he provide a personal guarantee and w[as]
unable to obtain that contractual protection." Therefore, the court declined to pierce
Rieck Oil's corporate veil.
KFOC appeals.
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----------------------- Page 7-----------------------
III. STANDARD OF REVIEW
"The appropriate choice of law is a legal question to which we apply our
independent judgment."6 "Whether the superior court applied the correct legal standard
is a question of law that we review de novo."7 "In doing so 'we will adopt the rule of
8
law that is most persuasive in light of precedent, reason, and policy. ' "
IV. DISCUSSION
An action to pierce the corporate veil is "brought by parties injured by the
corporation to hold liable those corporate officers, directors and/or stockholders whose
[conduct] caused the injury to the plaintiffs."9 Piercing the corporate veil "is an
equitable doctrine, premised on the court's ability to look past the 'legal fiction' to do
equity."10 Courts do so only in "exceptional circumstances."11
When a party seeks to pierce the veil of a foreign corporation, the court
must choose which state's law to apply: the forum state's law, the law of the state of
incorporation, or some other state's law. Until now, we have not had to decide how to
make this choice. In Pister v. State, Department of Revenue, we recognized that
"[c]ourts across the country have reached different conclusions about the proper law to
apply when veil-piercing claims are brought against foreign corporations." 12 But we
6 Pister, 354 P.3d at 362 (quoting Savage Arms, Inc. v. W. Auto Supply Co.,
18 P.3d 49, 52 (Alaska 2001)).
7 Rego v. Rego, 259 P.3d 447, 452 (Alaska 2011).
8 Ito v. Copper River Native Ass'n , 547 P.3d 1003, 1009 (Alaska 2024)
(quoting Douglas Indian Ass'n v. Cent. Council of Tlingit & Haida Indian Tribes of
Alaska , 403 P.3d 1172, 1175 (Alaska 2017)).
9 Brown v. Knowles, 307 P.3d 915, 925 (Alaska 2013) (quoting In re
Transcolor, 296 B.R. 343, 362 (Bankr. D. Md. 2003)) (alteration omitted).
10 Pister, 354 P.3d at 363 (quoting Brown, 307 P.3d at 928).
11 L.D.G., Inc. v. Brown , 211 P.3d 1110, 1125 (Alaska 2009).
12 354 P.3d at 364.
-7- 7758
----------------------- Page 8-----------------------
did not have to decide the proper approach in that case because the choice of law made
13
no difference to the outcome.
In this case the question is squarely presented. We first explain why the
choice between Alaska law and Delaware law is outcome-determinative. We then
explain the rule that Alaska courts must apply to decide which state's law governs veil-
piercing claims against a foreign corporation. And finally, we explain why, under this
approach, Alaska law applies to the claim at issue in this case.
A. Alaska Law And Delaware Law Are Different, And The Differences
Are Outcome-Determinative.
We first consider whether the choice-of-law question makes a difference
in the outcome of this case.14 The superior court ruled that Delaware law requires a
showing of injustice before the corporate veil may be pierced, while Alaska law does
not. We agree: Alaska law does not require a showing of injustice or unfairness to
pierce the corporate veil when the corporation is merely the "alter ego" of the
shareholder. We also conclude that the superior court did not err in determining that
KFOC failed to make the requisite showing of unfairness or injustice under Delaware
law. Consequently, the outcome of this case depends on whether Alaska or Delaware
law applies.
1. Alaska law does not require an additional element of injustice
to pierce the corporate veil under the alter ego test.
Rieck contends that Alaska and Delaware law both require a showing of
some "inequity, misconduct, or injustice" before the corporate veil may be pierced. He
13 Id.
14 See id. (declining to decide choice-of-law "[b]ecause we hold that the
superior court's findings justify piercing Northwest Medical's corporate veil under both
Alaska and Washington law"); see also, e.g., 15A C.J.S. Conflict of Laws § 31 (2024)
("The court need not engage in any choice-of-law analysis when no conflict is
established between the states' laws that potentially apply.").
-8- 7758
----------------------- Page 9-----------------------
asserts that because piercing the corporate veil is an equitable remedy, a court should
pierce the veil only if it is equitable to do so.
But Alaska law does not always require a showing of injustice to pierce
the corporate veil. Our case law recognizes two distinct tests for piercing the corporate
veil: a "misconduct" test and a "mere instrumentality"/"alter ego" test.15 Under the
misconduct test, the corporate veil "may be pierced 'if the corporate form is used to
defeat public convenience, justify wrong, commit fraud, or defend crime.' "16 Under
the mere instrumentality or alter ego test, we have "also recognized that the corporate
veil may be pierced when a corporation is nothing more than a 'mere instrument' of a
17
shareholder."
The existence of two separate tests to pierce the corporate veil has been
clear since our decision in Uchitel Co. v. Telephone Co.18 There we first considered
the misconduct test and concluded that the plaintiff "failed to present any evidence from
which it could be concluded that [the corporate owner] deceived [it] or that he employed
the corporate entities to defeat public policy or for some fraudulent or criminal
purpose."19 We then looked to an "alternative theory of liability [that] was developed
in cases dealing with parent-subsidiary relationships."20 Under this theory, "[t]he
15 L.D.G., Inc., 211 P.3d at 1125. We use the terms "alter ego" and "mere
instrumentality" interchangeably to refer to the same test. See 18 C.J.S. Corporations
§ 23 at n.5 (2024).
16 L.D.G., Inc., 211 P.3d at 1125 (quoting Elliot v. Brown, 569 P.2d 1323,
1326 (Alaska 1977); accord Uchitel Co. v. Tel. Co., 646 P.2d 229, 234 (Alaska 1982));
see also Pister, 354 P.3d at 364-65 (tax evasion is sufficient to pierce veil under
misconduct standard).
17 L.D.G., Inc., 211 P.3d at 1125 (emphasis added) (citing Uchitel Co., 646
P.2d at 235).
18 646 P.2d at 234.
19 Id.
20 Id. (emphasis added).
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parent corporation may also be liable for the wrongful conduct of its subsidiary when
the subsidiary is the mere instrumentality of the parent."21 In deciding whether a
corporation is a mere instrumentality of a shareholder, we consider six relevant
22
factors :
(a) whether the shareholder sought to be charged owns all or
most of the stock of the corporation; (b) whether the
shareholder has subscribed to all of the capital stock of the
corporation or otherwise caused its incorporation;
(c) whether the corporation has grossly inadequate capital;
(d) whether the shareholder uses the property of the
corporation as his own; (e) whether the directors or
executives of the corporation act independently in the
interest of the corporation or simply take their orders from
the shareholder in the latter's interest; (f) whether the formal
[23]
legal requirements of the corporation are observed.
Rieck suggests that even under Alaska's mere instrumentality test, some
form of wrongful conduct must be present. He cites a footnote in Uchitel, where we
quoted a North Carolina decision:
[W]hen . . . the corporation is so operated that it is a mere
instrumentality or alter ego of the sole or dominant
shareholder and a shield for his activities in violation of the
declared public policy or statute of the State, the corporate
entity will be disregarded and the corporation and the
shareholder treated as one and the same person, it being
immaterial whether the sole or dominant shareholder, is an
[24]
individual or another corporation.
21 Id. (quoting Jackson v. Gen. Elec. Co., 514 P.2d 1170, 1173 (Alaska
1973)).
22 Id. at 234-35.
23 Id. at 235 (adapting parent-subsidiary factors from Jackson to
shareholder-corporation context).
24 Id. at 235 n.14 (alterations in original) (quoting Henderson v. Sec. Mortg.
& Fin. Co., 160 S.E.2d 39, 44 (N.C. 1968)).
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Rieck understands the reference to violation of public policy to mean that a court can
pierce the corporate veil only when declining to do so would cause inequity. But that
is not the proposition the quote stands for. Rather, we quoted that case to explain why
the "determination of the liability of an individual shareholder is analytically similar"
to determining a parent-corporation's liability for a subsidiary.25 Our reliance on the
North Carolina decision had nothing to do with whether some kind of inequity must be
shown in addition to proving the corporation is the alter ego of the shareholder.26 In
fact, Uchitel is quite clear that when the corporation is the mere instrumentality of the
shareholder, "[l]iability is imposed . . . simply because the two corporations are so
27
closely intertwined that they do not merit treatment as separate entities."
In sum, a plaintiff need not make an additional showing of injustice or
unfairness to pierce the corporate veil under Alaska's mere instrumentality test.
Therefore, if Alaska law governs the veil-piercing dispute in this case, KFOC need only
prove that the Uchitel factors have been satisfied.
2. The injustice element required by Delaware law is not met, and
because Alaska law would produce a different outcome, we
must decide whether the choice of Delaware law was correct.
Like Alaska law, Delaware law recognizes the misconduct and mere
instrumentality tests.28 But the distinction between the two tests is somewhat blurred.
25 Id.
26 See id. at 234-35, 235 n.14.
27 Id. at 234 (quoting Jackson v. Gen. Elec. Co., 514 P.2d 1170, 1173 (Alaska
1973)).
28 See Fletcher v. Atex, Inc., 68 F.3d 1451, 1457 (2d Cir. 1995) ("Delaware
law permits a court to pierce the corporate veil of a company 'where there is fraud or
where [it] is in fact a mere instrumentality or alter ego of its owner.' " (alteration in
original) (quoting Geyer v. Ingersoll Publ'ns Co., 621 A.2d 784, 793 (Del. Ch. 1992))).
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While the exact level of misconduct required to pierce the corporate veil is unclear,29
Delaware case law suggests that there must be at least some form of misconduct to
30
pierce the corporate veil, even under an alter ego theory.
KFOC argues that the superior court misconstrued Delaware law to
require "intentional wrongdoing" to satisfy the injustice element, as opposed to only
"something similar to a sham." KFOC does not challenge the court's factual findings.
However, it contends that had the court applied the correct legal standard to the facts,
the evidence would have been sufficient to pierce Rieck Oil's veil.
We disagree with KFOC's contention that there is a "massive difference
between a standard that requires intentional wrongdoing and one that requires
something similar to a sham." In Blair v. Infineon Technologies AG , the United States
District Court for the District of Delaware explained that under Delaware law, "the
requisite injustice or unfairness is not that the parent corporation committed an actual
fraud or sham but just 'something that is similar in nature to fraud or a sham.' "31 While
Blair did apply federal veil-piercing law, the court explained that under Delaware law,
32
"fraud or something like it is required."
29 See, e.g., Multi-Media Holdings, Inc. v. Piedmont Ctr., 15 LLC, 583
S.E.2d 262, 264 (Ga. App. 2003) (concluding it is unclear whether Delaware law
requires showing of fraud); David v. Mast, No. 1369-K, 1999 WL 135244, at *2 (Del.
Ch. Mar. 2, 1999) ("The legal test for determining when a corporate form should be
ignored in equity cannot be reduced to a single formula that is neither over nor under-
inclusive." (quoting Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983, 989
(Del. Ch. 1987))).
30 See In re Foxmeyer Corp., 290 B.R. 229, 236 (Bankr. D. Del. 2003).
31 720 F. Supp. 2d 462, 471 (D. Del. 2010) (quoting In re Foxmeyer , 290
B.R. at 236).
32 Id. (quoting In re Foxmeyer , 290 B.R. at 236); see also Mobil Oil Corp. v.
Linear Films, Inc. , 718 F. Supp. 260, 268 (D. Del. 1989) (declining to conduct
protracted choice-of-law analysis for alter ego because federal, Delaware, and
Oklahoma common law all produced same outcome: "Fraud or something like it is
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----------------------- Page 13-----------------------
In its order, the superior court recognized that the injustice element under
Delaware law has been described in several ways:
* "requires that the corporate structure cause fraud or
33
similar injustice";
34
* "a showing of fraud or something like fraud";
* "[e]ffectively, the corporation must be a sham and
exist for no other purpose than as a vehicle for
35
fraud";
* "[u]nless done deliberately, with specific intent to
escape liability for a specific tort or class of torts, the
cause of justice does not require disregarding the
36
corporate entity."
The court ultimately used the following interpretation : whether "Mr. Rieck abused the
corporate form for the purpose[] of committing fraud or similar injustice against
[KFOC]." Applying our independent judgment, we agree with the superior court's
summary of Delaware law.
We also agree with the superior court's conclusion that the evidence does
not establish this kind of misconduct. The undisputed facts here are not comparable to
required."); Pauley Petroleum, Inc. v. Cont 'l Oil Co., 239 A.2d 629, 633 (Del. 1968)
(Delaware law).
33 Wallace ex rel. Cencom Cable Income Partners II, Inc., L.P. v. Wood, 752
A.2d 1175, 1184 (Del. Ch. 1999) (quoting Outokumpu Eng'g Enter., Inc. v. Kvaerner
EnviroPower, Inc., 685 A.2d 724, 729 (Del. Super. 1996)).
34 Mobil Oil Corp., 718 F. Supp. at 268.
35 Wallace ex rel. Cencom Cable Income Partners II, Inc., 752 A.2d at 1184.
36 Trevino v. Merscorp, Inc., 583 F. Supp. 2d 521, 530 (D. Del. 2008)
(quoting Mobil Oil Corp., 718 F. Supp. at 269).
The superior court also described the standard "fraud or injustice akin to
intentional wrongdoing," but this standard pertains to Illinois law, not Delaware law.
Blair, 720 F. Supp. 2d at 470 (citing Lumpkin v. Envirodyne Indus., Inc., 933 F.2d 449,
463 (7th Cir. 1991)).
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----------------------- Page 14-----------------------
those in the cases KFOC cites.37 The Delaware Court of Chancery has held that "[a]cts
38
intended to leave a debtor judgment proof are sufficient to show fraud and injustice."
In that case, the court held that the plaintiffs had pleaded enough facts to pierce the
corporate veil when alleging that a corporation was formed specifically to divert funds
from a debtor corporation.39 The court explained that the case for veil-piercing "[did]
not rest on insolvency alone," noting that the plaintiff alleged there was a "deliberate
decision to undercapitalize the entity."40 In another case, a plaintiff adequately pleaded
a veil piercing claim when it alleged the defendant siphoned funds and "strategically
sold [the company's] parent entity in order to prevent Plaintiff from recovering any
award issued by the arbitrators."41 No such conduct was found here. Rather, the
superior court found that Rieck Oil was formed for legitimate purposes, that Rieck did
not intend to avoid satisfaction of the remediation obligations, and that Rieck did not
cause any assets to be removed from the companies to avoid satisfying remediation or
judgment. These facts, showing only undercapitalization or insolvency, are not enough
42
to establish injustice under Delaware law.
37 See Manichaean Cap., LLC v. Exela Techs., Inc., 251 A.3d 694, 707-08
(Del. Ch. 2021) (concluding injustice or unfairness could exist where holding company
was insolvent and was aware of its "potential liability long ago and yet made a
deliberate decision to undercapitalize the entity"); Gadsden v. Home Pres., Co., No.
Civ. A. 18888, 2004 WL 485468, at *5 (Del. Ch. Feb. 20, 2004) (finding fraud where
defendant intentionally removed funds from corporate accounts).
38 Manichaean Cap. , 251 A.3d at 708-09 (quoting Compagnie des Grands
Hotels d 'Afrique S.A. v. Starwood Cap. Grp. Glob. I LLC , No. 18-654-RGA, 2019 WL
148454, at *5 (D. Del. Jan. 9, 2019)).
39 Id. at 709-10.
40 Id. at 707-08, 707 n.62.
41 Compagnie des Grands Hotels d 'Afrique S.A. , 2019 WL 148454, at *5.
42 Manichaean Cap., LLC, 251 A.3d at 707-08; Trevino v. Merscorp, Inc.,
583 F. Supp. 2d 521, 529-30 (D. Del. 2008) (explaining that shortage of capital is
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----------------------- Page 15-----------------------
We also reject KFOC's contention that making promises that could never
be honored is sufficient misconduct. The case KFOC cites - David v. Mast43 - is
factually distinct from the case at hand. In Mast the court pierced the corporate veil
when a corporation's sole shareholder advertised goods and services with a ten-year
warranty by a national franchiser that the shareholder knew had no funds to honor such
a warranty.44 Critically, that shareholder "misrepresent[ed] the corporate entity's
45
capacity to perform contrary to law and [misled] a consumer protected by [statute]."
It is uncontested here that Rieck did not make any misrepresentations and that KFOC
"understood the nature of the risks they were undertaking."
In sum, we see no error in the superior court's conclusion that there was
not enough evidence to show the injustice element required to pierce the corporate veil
of Rieck Oil under Delaware law. Because Alaska law does not impose a similar
requirement under the alter ego test and would produce a different outcome, we must
decide whether the choice of Delaware law was correct.
B. The Veil-Piercing Claim Does Not Implicate The Internal Affairs Of
The Corporation, So The Court Must Balance The Relevant Interests
To Determine Which State's Law To Apply.
In Pister we recognized that "[c]ourts across the country have reached
different conclusions about the proper law to apply when veil-piercing claims are
brought against foreign corporations."46 We outlined the two competing approaches:
to apply the law of the state of incorporation in every case, or to apply "more general
relevant to "whether the corporation was established to defraud its creditors" but "is not
per se a reason to pierce the corporate veil").
43 No. 1369-K, 1999 WL 135244, at *1-3 (Del. Ch. Mar. 2, 1999).
44 Id. at *1.
45 Id.
46 Pister v. State, Dep 't of Revenue, 354 P.3d 357, 364 (Alaska 2015).
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choice-of-law principles, such as an evaluation of the states' respective interests."47 It
was not necessary in Pister to decide which approach to adopt because the choice of
48
law there made no difference to the outcome.
In this case, the superior court applied the law of the state of incorporation,
observing that courts in the vast majority of jurisdictions take this approach. The
majority approach, as we explain below, treats veil-piercing as a matter of a
corporation's internal affairs, which are governed by the law of the state of
incorporation. The superior court also cited Section 307 of the Restatement (Second)
of Conflict of Laws, which states that the law of the state of incorporation controls
shareholder liability for corporate debts.
We see the matter differently. While we look to the Restatement for
guidance when resolving choice-of-law issues,49 we do not read the Restatement to
mean that veil-piercing claims involve matters of internal corporate affairs that must be
governed by the law of the state of incorporation. As other courts have recognized,
"alter ego liability and the related doctrine of piercing the corporate veil" generally
"do[] not involve consideration of corporate internal affairs," but rather "the abuse of
the corporate form to the detriment of third parties."50 Because veil-piercing generally
47 Id.
48 Id. at 364-66.
49 Savage Arms, Inc. v. W. Auto Supply Co., 18 P.3d 49, 53 (Alaska 2001);
Palmer G. Lewis Co. v. ARCO Chem. Co., 904 P.2d 1221, 1227 (Alaska 1995) ("When
choice of law issues arise, we commonly refer to the Restatement (Second) of Conflicts
for guidance."); see also Ehredt v. DeHavilland Aircraft Co. of Canada , 705 P.2d 446,
453 (Alaska 1985) (applying Restatement to determine which law governs measure of
damages in wrongful death suit when representative of deceased resided out of state).
50 UBS Sec. LLC v. Highland Cap. Mgmt., L.P., No. 650097/2009, 924
N.Y.S.2d 312, 2011 N.Y. Slip Op. 50297(U) at *3 (Sup. Ct. N.Y. Mar. 1, 2011), aff 'd
in relevant part, 940 N.Y.S.2d 74, 74 (N.Y. App. Div. 2012) ("The motion court
correctly ruled that New York law governs plaintiff's veil-piercing claim . . . .").
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is not an internal affair, we conclude that a court must apply an interests-based analysis
to determine which state's law governs a claim to pierce the corporate veil.
The Restatement generally provides that, absent a governing statute, the
choice of law must be determined by a balance of interests.51 This balance involves
considering, among other things, the interests of the forum state, the relevant interests
of other states, protecting justified expectations, and ensuring "certainty, predictability
52
and uniformity of result."
The Restatement also provides specific guidance for resolving choice-of-
law questions involving business corporations. Under Section 301 rights and liabilities
flowing from corporate acts of the kind that can be taken by individuals, such as torts
and contracts, "are determined by the same choice-of-law principles as are applicable
to non-corporate parties."53 That is, the choice of law in these cases will be determined
by the same balance of interests described above.
The rule is different for rights and liabilities arising from issues "peculiar
to corporations."54 In those instances, Section 302 provides that the law of the state
with the "most significant relationship to the occurrence" under the factors described
above will usually be the law of the state of incorporation "except in the unusual case
where . . . some other state has a more significant relationship."55 In effect, Section 302
51 See RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 6 (AM. L. INST .
1971).
52 Id.
53 Id. § 301.
54 Id. § 302 & cmt. a.
55 Id. § 302.
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presumes the "law of the state of incorporation will be applied" to disputes peculiar to
56
corporations unless some other jurisdiction has a more significant relationship.
Piercing the corporate veil is, undoubtedly, a matter "peculiar to
corporations." So Section 302 applies. But it does not follow that veil-piercing is a
matter of "internal affairs" of the corporation. On this question, consulting the
commentary to Section 302 is helpful. In describing the kinds of matters that are
"peculiar to corporations," the comment distinguishes between the " 'internal affairs'
of a corporation - that is the relations inter se of the corporation, its shareholders,
directors, officers or agents" - and other matters that "affect the interests of the
corporation's creditors."57 In the category of internal affairs fall
steps taken in the course of the original incorporation, the
election or appointment of directors and officers, the
adoption of by-laws, the issuance of corporate shares,
preemptive rights, the holding of directors ' and
shareholders' meetings, methods of voting including any
requirement for cumulative voting, shareholders' rights to
examine corporate records, charter and by-law amendments,
mergers, consolidations and reorganizations and the
reclassification of shares.[58]
This list reflects the underlying principle of the internal affairs doctrine,
"which recognizes that only one State should have the authority to regulate a
corporation's internal affairs . . . otherwise a corporation could be faced with conflicting
demands."59 It would be impractical to have matters that "involve a corporation's
56 Id. § 302(2); see id. § 302 cmt. b ("These factors, for reasons stated in
Comments e-h, will usually lead to the application of the local law of the state of
incorporation, which in the situation dealt with here is a contact of great significance.").
57 Id. § 302 cmt. a.
58 Id.
59 Edgar v. MITE Corp., 457 U.S. 624, 645 (1982).
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organic structure or internal administration" governed by different laws.60 The
Restatement points to the chaos that would ensue if "an election of directors, an issuance
of shares, a payment of dividends, a charter amendment, or a consolidation or
61
reorganization were to be held valid in one state and invalid in another."
But only some matters fall within the category of affairs or issues that
cannot reasonably be subject to the laws of different states. Section 302's comment
recognizes that "there is no reason why corporate acts" like "the making of contracts,
the commission of torts and the transfer of property" must always be governed by the
law of the state of incorporation.62 It also clarifies that "certain issues which are
peculiar to corporations . . . do not affect matters of organic structure or internal
administration and need not, as a practical matter, be governed by a single law," even
if the law of the state of incorporation usually ends up being applied.63 Accordingly,
the key question is whether piercing the corporate veil is a matter "peculiar to
corporations" but not an internal affair that must be governed by a single state's law.
The superior court relied on Section 307 of the Restatement to describe
veil-piercing as an internal affair, following courts in some jurisdictions . But Section
307 does not expressly mention veil-piercing and provides only: "The local law of the
state of incorporation will be applied to determine the existence and extent of a
shareholder's liability to the corporation for assessments or contributions and to its
creditors for corporate debts."
60 RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 302 cmt. e. (AM. L.
INST . 1971).
61 Id.
62 Id.
63 Id. ; accord id. § 309 cmt. c ("It would be practicable, for example, for a
director to be held liable for a given act in one state and to be held not liable for an
identical act in another state.").
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There is reason to think Section 307 was not intended to designate veil-
piercing as an "internal affair" always governed by the law of the state of incorporation.
Although the Restatement explains that matters of internal corporate affairs "fall within
the scope of" Sections 303-310,64 the topics described are not exclusively matters of
internal corporate affairs.65 For example, Section 303 provides that the "local law of
the state of incorporation will be applied to determine who are shareholders of a
corporation except in the unusual case where, with respect to the particular issue, some
other state has a more significant relationship."66 The comment indicates that as a
general matter, the rationale for the internal affairs doctrine squarely applies: "uniform
treatment of the shareholders of a corporation is an important objective which can only
be attained by having their rights and liabilities with respect to the corporation governed
by a single law."67 But when the rights of third parties may be involved, such as
questions of inheritance and divorce, the law of a different state may apply.68 This
qualification indicates that matters described in Sections 303-310 are not always matters
of the corporation's internal affairs that must be governed by the law of the state of
incorporation.
Further, while the text of Section 307 is broad enough to encompass
claims to pierce the corporate veil, the commentary to the rule does not mention veil-
piercing and has a narrower focus.69 The first comment discusses "the liability to which
64 See id. § 302 cmt. a (explaining that matters that "involve the 'internal
affairs' of a corporation . . . fall within the scope of the rules of §§ 303-310").
65 Sections 303-310 describe choice-of-law rules for matters involving
corporate officers, directors, and shareholders. Id. §§ 303-310.
66 Id. § 303.
67 Id. § 303 cmt. d.
68 Id. § 303 cmt. e.
69 See id. § 307.
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a person subjects himself by purchasing, or subscribing to, shares of a corporation."70
An obvious example of such liability is any remaining balance for stock subscriptions,
but the comment also explains that some jurisdictions hold shareholders liable for
normal business debts in particular industries, such as banking and insurance, or when
capital stock has yet to be paid in.71 The comment then discusses how the law of the
state of incorporation may impose liability for corporate debts on some classes of
shareholders and not others.72 Veil-piercing is unmentioned.
To the extent Section 307 alludes to veil-piercing, it suggests that an
interests-balancing analysis applies. Although the text of Section 307 does not contain
an exception for when another state has a more significant interest, the reporter's note
does. It provides:
A state may impose liability upon a shareholder of a foreign
corporation for an act done by the corporation in the state, if
the state's relationship to the shareholder is sufficient to
make reasonable the imposition of such liability upon him.
[73]
Even if Section 307 was meant to address veil-piercing, it does not clearly treat veil-
piercing as an internal affair that must always be governed by the law of the state of
incorporation.
Given this lack of clarity, courts have reached different conclusions on
whether veil-piercing is governed by the internal affairs doctrine.74 Many courts have
70 Id. § 307 cmt. a.
71 Id.
72 Id.
73 Id. at § 307 rep's note (citing Thomas v. Matthiessen, 232 U.S. 221 (1914);
Pinney v. Nelson, 183 U.S. 144 (1901)).
74 Compare Matson Logistics, LLC v. Smiens , No. 12-400, 2012 WL
2005607, at *6 (D. Minn. June 5, 2012) (noting "the near unanimity of courts in
applying the internal affairs doctrine to veil piercing claims"), and Container Life Cycle
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held, as Rieck argues, that veil-piercing is an inherently internal affair. For instance,
the Northern District of Iowa has explained: "the internal affairs doctrine still
specifically applies to piercing the corporate veil and/or alter ego theories because
whether or not the independence of an out-of-state entity will be respected is collateral
to and not part of the parties' negotiations or expectations with respect to the
contract."75 The court added that the internal affairs doctrine "has the added benefit of
recognizing that the state of organization generally 'has the greater interest in
determining when and if' limited liability may 'be stripped away ' from an entity
76
organized pursuant to its laws."
But a bright line rule always applying the law of the state of incorporation
does not necessarily result in application of the law of the state with the greater interest
in the dispute. We are more persuaded by the reasoning of the decisions concluding
that veil-piercing is not subject to the internal affairs doctrine. For example, the South
Carolina Supreme Court has reasoned that although "[v]eil piercing cases implicate
corporate law[, they] involve disputes that reach beyond the confines of the
Mgmt. LLC v. Safety Mgmt. Servs. Co., No. 6:20-CV-06001, 2020 WL 2843224, at *4
(W.D. Ark. June 1, 2020) ("[T]he Court notes the majority of jurisdictions addressing
the question of choice of law in the context of veil piercing apply the law of the state of
incorporation."), with Pertuis v. Front Roe Rests., Inc., 817 S.E. 2d 273, 278 (S.C. 2018)
(applying forum state's law because "although '[v]eil piercing cases implicate corporate
law[, they] involve disputes that reach beyond the confines of the corporation' "
(quoting 1 WILLIAM MEADE FLETCHER ET AL., FLETCHER CYCLOPEDIA OF THE LAW
OF CORPORATIONS § 43.72 (2015))), and Oncology Therapeutics Network Connection
v. Va. Hematology Oncology PLLC, No. C 05-3033, 2006 WL 334532, at *17 (N.D.
Cal. Feb. 10, 2006) ("[I]t is not clear to us that an 'alter ego' claim such as that asserted
by plaintiff involves 'internal' affairs of the corporation, as opposed to affairs 'external'
to the corporation.").
75 Tyson Fresh Meats, Inc. v. Lauer Ltd., L.L.C., 918 F. Supp. 2d 835, 850
(N.D. Iowa 2013) (quoting Matson Logistics, LLC, 2012 WL 2005607, at *6).
76 Id. (quoting Dassault Falcon Jet Corp. v. Oberflex, Inc., 909 F. Supp. 345,
349 (M.D.N.C. 1995)).
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corporation."77 The court held that a claim involving "amalgamation" of two foreign
corporations "is not as much a question of [their] inner-workings" as an "assessment of
whether these entities actually operate as a single business enterprise, and thus should
be treated as a single entity."78 Accordingly the court did not apply the internal affairs
79
doctrine to determine choice of law.
Similarly, a federal district court in Michigan rejected the internal affairs
doctrine when deciding which state's law should be applied to pierce the corporate veil
on claims of environmental liability.80 Citing the Restatement, the court acknowledged
that piercing the corporate veil may be a "theor[y] of liability peculiar to corporations,
in which case § 302 applies."81 But the court reasoned : "Even if that is so, the terms
of § 302 do not mandate the law of the state of incorporation . . . where the matter is not
one of internal corporate governance but rather external liability."82 The court thus
looked to the law of the state having the most significant relationship to the lawsuit
83
rather than the law of the state of incorporation.
These decisions may be a numerical minority, but they are not "outliers,"
as the superior court suggested.84 Indeed, they are consistent with the way the United
77 Pertuis, 817 S.E.2d at 278 (quoting 1 WILLIAM MEADE FLETCHER ET AL.,
FLETCHER CYCLOPEDIA OF THE LAW OF CORPORATIONS § 43.72 (2015)).
78 Id.
79 Id.
80 Chrysler Corp. v. Ford Motor Co., 972 F. Supp. 1097, 1102 (E.D. Mich.
1997).
81 Id.
82 Id.
83 Id.
84 Other decisions with similar reasoning are: TAC-Critical Sys., Inc., v.
Integrated Facility Sys., Inc., 808 F. Supp. 2d 60, 63-65 (D.D.C. 2011) (describing
application of internal affairs doctrine to veil-piercing claims as misreading Section
307); United States v. Clinical Leasing Servs., Inc., 982 F.2d 900, 902 n.5 (5th Cir.
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States Supreme Court has framed the internal affairs doctrine. In First National City
Bank v. Banco Para El Comercio Exterior de Cuba, the Supreme Court considered a
case in which a state-owned Cuban bank brought suit against an American bank to
recover an unpaid letter of credit.85 The American bank counterclaimed, asserting a
86
right to set off the value of the assets the Cuban government seized and nationalized.
In addressing which conflict of laws principles apply in determining whether a
government instrumentality may be held liable for actions taken by the sovereign, the
Court stated:
As a general matter, the law of the state of incorporation
normally determines issues relating to the internal affairs of
a corporation. Application of that body of law achieves the
need for certainty and predictability of result while generally
protecting the justified expectations of parties with interests
in the corporation . . . . Different conflicts principles apply,
1992) (citing RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 306 (AM. L. INST .
1971)) (applying Louisiana law rather than law of state of incorporation because
Louisiana had more significant relationship to lawsuit); Multi-Media Holdings, Inc. v.
Piedmont Ctr. 15 LLC, 583 S.E.2d 262, 265 (Ga. App. 2003) (explaining, in dicta, that
even if Georgia applied Restatement rules for conflicts of laws, veil-piercing would not
be subject to internal affairs doctrine); Kempe v. Ocean Drilling & Expl. Co., 683 F.
Supp. 1064, 1072 (E.D. La. 1988) (concluding that Restatement § 307 calls for interests
analysis in veil-piercing claims); Oncology Therapeutics Network Connection v.
Virginia Hematology Oncology PLLC, No. C 05-3033, 2006 WL 334532, at *17 (N.D.
Cal. Feb. 10, 2006) (clarifying that claim to pierce corporate veil based on alter ego
theory does not clearly involve "internal" affairs of, rather than "external" affairs to,
corporation); Kelly v. Corizon Health Inc., No. 2:22-cv-10589, 2022 WL 16575763, at
*6 (E.D. Mich. Nov. 1, 2022) (holding that internal affairs doctrine did not apply when
external party was affected); Itel Containers Int 'l Corp. v. Atlanttrafik Express Serv.
Ltd., No. 86 CIV. 1313, 1988 WL 75262, at *4 n.8 (S.D.N.Y. July 13, 1988) (rejecting
internal affairs rule for third party's claim that foreign corporate entity was alter ego of
another).
85 462 U.S. 611, 613 (1983) (abrogated by statute on other grounds as
recognized in Rubin v. Islamic Republic of Iran , 583 U.S. 202 (2018)).
86 Id.
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however, where the rights of third parties external to the
[87]
corporation are at issue.
Noting the external nature of the dispute - between the American bank and the Cuban
bank - as well as the consequences of a rigid rule applying the law of the state of
88
incorporation to veil-piercing, the Supreme Court declined to apply Cuban law.
Although First National City Bank is unusual because it involved a foreign government-
owned corporation, the Court's underlying logic is persuasive: veil-piercing is not an
89
internal corporate affair because the rights of external parties are involved.
Therefore, we conclude that under Alaska law, a veil-piercing claim is not
an internal affair of the corporation. Alaska courts adjudicating veil-piercing claims
against foreign corporations must, consistent with Section 302, apply the law of the
state of incorporation unless "some other state has a more significant relationship to the
occurrence and the parties."
C. Alaska Has A More Significant Interest In The Matter Than
Delaware, So Alaska Law Applies.
We finally address whether, under the interests-balancing approach
described in Restatement Section 302, Alaska or Delaware law should govern KFOC's
veil-piercing claim against Rieck Oil.90 Section 302 provides: "Issues involving the
rights and liabilities of a corporation . . . are determined by the local law of the state
87 Id. at 621. (emphasis in original) (internal citation omitted) (citing
RESTATEMENT (SECOND) OF CONFLICT OF LAWS §§ 301, 302 cmt. a & e (AM. L. INST .
1971)).
88 Id. at 622.
89 Rieck argues that "forty out of fifty states have applied the law of the state
of incorporation to veil-piercing issues." But Rieck's analysis merely identifies
decisions in which the law of the state of incorporation has been applied. It is not a true
measure of how many states have applied the internal affairs doctrine as a rule to
determine which state's law should apply to veil-piercing.
90 KFOC argues that balancing the respective interests favors Alaska law.
Rieck does not address this issue in its briefing.
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which, with respect to the particular issue, has the most significant relationship to the
occurrence and the parties under the principles stated in § 6."91 It goes on to explain
that the law of the state of incorporation will apply "except in the unusual case where,
with respect to the particular issue, some other state has a more significant relationship
to the occurrence and the parties."92 The comment to this section goes on to state:
The reasons for applying the local law of the state of
incorporation carry less weight when the corporation has
little or no contact with this state other than the fact that it
was incorporated there. In such situations, some other state
will almost surely have a greater interest than the state of
incorporation in the determination of the particular issue.[93]
This is one of those unusual cases in which a state other than the state of
incorporation has a more significant interest in having its law applied.94 The superior
91 Section 6(2) provides that the principles relevant to the choice of the
applicable rule of law include:
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests
of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and unsiformity of result, and
(g) ease in the determination and application of the law to be applied.
92 RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 302(2) (AM. L. INST .
1971).
93 Id . § 302 cmt. g.
94 We have never directly applied the principles described in Section 6 of the
Restatement to decide a choice-of-law question. We have applied other sections of the
Restatement, which refine the principles of Section 6 for use in specific areas of law
like contracts and torts. Savage Arms, Inc. v. W. Auto Supply Co. , 18 P.3d 49, 54
(Alaska 2001) (citing RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145(1) (AM.
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court found that "Rieck Oil's sole connection to Delaware is that it was incorporated
there; Rieck Oil never paid taxes, held a corporate meeting, or opened a corporate bank
account in Delaware - or anywhere else." The superior court reasoned that Delaware's
sole interest was "preserving its status as a favored state of incorporation."
As a general rule, applying the law of the state of incorporation to veil-
piercing disputes arising out of contract cases will protect parties' expectations and
promote predictability - important considerations under Section 6 of the Restatement.
Had parties to a contract with a Delaware corporation thought about it, they might have
expected that Delaware law would govern attempts to override limitations on the
corporation's liability unless they negotiated for some other state's law to apply.
But those expectations are less justified when the corporation is no more
than the alter ego of a single shareholder. Predictability is entitled to less weight when
there are no other shareholders, officers, or employees who might have counted on the
protections of Delaware law.
The superior court also determined that Alaska's interests in having its
veil-piercing law applied are significant. The dispute concerns indemnification for
liabilities of a bankrupt Alaska LLC to an Alaska Native Corporation to remediate
Alaska lands used for natural gas production. Alaska has a strong interest in the
95
fulfillment of contractual obligations to clean up its lands used for industrial purposes.
Protecting these tangible interests supports the application of Alaska veil-piercing law.
L. INST . 1971) (describing rules for determining state with most significant relationship
to parties and occurrence under the principles stated in § 6)); Long v. Holland Am. Line
Westours, Inc., 26 P.3d 430, 432-33 (Alaska 2001) (citing RESTATEMENT (SECOND) OF
CONFLICT OF LAWS § 188 (AM. L. INST . 1971) (describing rules for determining state
with most significant relationship to transaction and parties in contract disputes)).
95 Cf. Savage Arms, 18 P.3d at 54 (holding Alaska had more significant
interest than Texas in applying its law to determine corporate successor liability for
injuries caused by defective rifle, which "potentially endangered any person within a
lethal vicinity while the rifle was being used in Alaska").
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Because Delaware's only connection is that it was the state of
incorporation for a corporation that is merely the alter ego of a single shareholder, we
96
conclude that Alaska's interests in applying its veil-piercing law exceed Delaware's.
V. CONCLUSION
For the foregoing reasons, we VACATE the judgment of the superior
court and REMAND for further proceedings consistent with this opinion.
96 See, e.g., Chrysler Corp. v. Ford Motor Co., 972 F. Supp. 1097, 1103-04
(E.D. Mich. 1997) (concluding that Michigan had most significant interest when "[t]he
only factor pointing elsewhere is the fact that [the corporation] was incorporated in
Pennsylvania"); Kempe v. Ocean Drilling & Expl. Co., 683 F. Supp. 1064, 1072 (E.D.
La. 1988) (noting previous cases where courts applied Louisiana law when only contact
with foreign state was "the naked fact of the corporation").
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